House appropriators introduced a new spending bill Tuesday that would cut the Internal Revenue Service by $236 million compared to current funding.
The bill would fund the IRS at $10.9 billion, $1.3 billion less than the Obama administration's request, and includes other IRS reforms. Among other changes, the House financial services appropriations bill would block a proposed regulation relating to political nonprofits, and prohibit funding used to "target" groups or individuals for scrutiny based on ideology.
The administration has said cuts to the IRS budget over the last several years has led to significant reductions in customer service. But the GOP bill keeps the current level of funding for taxpayer services, and Republicans say the IRS needs to be reined in.
Rep. Ander Crenshaw, chairman of the appropriations subcommittee for financial services, cited the IRS' "history of inappropriate behavior" in targeting Tea Party political nonprofits for added scrutiny.
The legislation also includes significant changes to the Consumer Financial Protection Bureau, the agency created by President Obama's financial refom law with oversight over consumer financial products.
While the bureau currently receives its funding from the independent Federal Reserve, under the bill's terms it would get its funding from Congress, a switch that Republicans have sought to increase their influence over the agency's operations.
And the bureau's single director would be replaced with a five-member bipartisan commission. Republicans favor a commission as a more accountable structure, while the bureau's Democratic backers have said that a commission would hamper its ability to act quickly.
While including policy changes, known as "riders" in appropriations bills, is a way to force an administration of the other party to accept measures they don't like, the Obama administration was successful last year in keeping such provisions out of the year-end spending bill that kept the government open. Liberal groups have rallied early to raise opposition to changes such as the one Republicans seek for the bureau.
The financial services spending bill is scheduled to be marked up in committee Wednesday.
Other reform measures included in the legislation are:
— A provision to prevent the Securities and Exchange Commission from writing a rule to require corporations to disclose their political contributions, a disclosure sought by Democrats. The SEC would get a $226 million cut in funding from last year, down to $1.5 billion.
— A new section of the bankruptcy code specifically for banks, a reform Republicans have sought as an alternative to the bank resolution mechanism in the president's financial reform law. The bill previously passed the House in April.
— A measure to stop the Financial Stability Oversight Council, the supergroup of regulators tasked with finding non-bank threats to the financial system, from labeling any more firms "systemically important" and setting them up for added regulation without providing an explanation of why they were doing so and giving the firm a chance to overhaul its operations to avoid the designation.
— A prohibition on the Treasury using funds to redesign the $1 note.